Q&A: Karl Helgesen, RSA

RSA has recently announced a multi-million investment into home insurance claims service. What is the rationale behind this?

It’s really about the desire to proactively deliver excellence in customer service, particularly at this time, which is incredibly difficult for many of our customers.

But, of course, there are still a number of broader considerations if you think about environmental factors. For example, a recent report by JBA Risk Management highlights that one in four properties are at the risk of flooding, and recent research conducted by Oxford University and the Royal Meteorological Institute suggests that events such as Storm Desmond are now nearly 60% more likely to happen. The risk of damage due to adverse weather events, as a result of changes in in our climate, is very real and is increasing, and we want to make sure that we’re set up to help support our customers.

The risk of damage due to adverse weather events, as a result of changes in in our climate, is very real and is increasing, and we want to make sure that we’re set up to help support our customers

How will it help to support customers?

An additional 50 people, as well as a broader training programme, is really going to help us to support our customers better and help manage those broader risks. We believe those proposals are going to give us a better level of control in in reducing claim life cycles, reducing the time to settle, improving on-the-ground communication for our customers, and allowing us to effectively liaise and coordinate with our business partners, which is really important when you’re dealing with big building claims.

You’ve mentioned weather events; how is extreme weather affecting home claims?

We are seeing an increase in the cost and the severity of flood-related claims. Not only from traditional fluvial flooding, for example, but from a higher level of prevalence around flash flooding as well. And, of course, that becomes more difficult to protect through flood defences because of the indiscriminate nature of those type of events. The Met Office research has shown that the amount of rain we get from extremely wet days has increased by more than 20% over the past 40 years. The severity of the weather we’re seeing is obviously increasing, and that is having an impact in terms of the type of claims we’re seeing.

How do you manage the frequency of bad storm events?

It is manageable at the moment, insofar as many of the storms that we have seen more recently  tend to be wind-storm events, where the claims are high-volume claims, but relatively low value. We have a very strong and capable supply chain response to be able to manage those events. Obviously, there is a capacity challenge if you have a number of big-weather events, which ultimately results in substantial flooding across the UK, because then that does become more challenging to manage due to the availability and capacity we have as an industry to be able to service those events.

How are shortages in the supply chain affecting claims cycles at the moment?

We are seeing that the availability of materials is proving more challenging, and therefore that has the potential to impact claim life cycles at the moment. However, a huge amount of work is going into managing that risk with our partners and suppliers to try and mitigate that as best we can. And it depends on where you are across the country as to when that might cause an impact, equally. We have seen some impact as well as a result of Covid-19, unfortunately, as a result of increasing infection rates, particularly around the Omicron variant. We’ve noticed that some customers may be more reluctant to have contractors in the property at that time, which elongates the repair times.

Is there more the industry needs to do in order to prepare for these events?

We need to continue to help support our customers with the actions that can be taken to help improve flood resilience in terms of whether that’s flood protection measures, and whether it’s about the materials they use to help reduce the impact when flooding does occur. It’s also about education around the practical steps people can take. Alongside that, there has been significant government investment in flood defences over the years. In 2020, the government announced a £5.2bn spending programme on flood defences, which is helping to protect customers from the very real risk of flooding.